When Sequoia Capital invests, people pay attention. Since its founding in 1972, the firm has invested in 350 technology ventures, 100 of which have gone public or been acquired. Legendary partner Don Valentine told Upside, "I've had a front-row seat in the formation of some incredibly great companies that have created millions of jobs and billions of dollars worth of exports. It's been a magical time." Magical, indeed. Under Valentine's guidance, Sequoia had the good fortune to invest early in companies such as Yahoo! and Cisco Systems. Recently, Sequoia hit pay dirt with VA Linux, the maker of the Linux operating system. VA Linux went public in December 1999, earning $132 million. Sequoia public companies have a history of excellent performance. Since 1980, Sequoia portfolio company IPOs have increased in value over 665%. Sequoia also funded the Sequoia Capital Seed Fund, an early stage venture capital fund that invests in Israeli companies. The fund, managed by Haim Sadger, has so far invested in four technology companies: Pentacom, ModusNovo, 3i Systems and AirSlide Systems.

Investment strategy: do whatever, provided it's what we tell you

While Sequoia offers funding at a wide range of levels, the firm has a distinct preference for early stage financing, and in particular, seed financing. A Sequoia investment can range anywhere from $50,000 to $10 million. Says firm literature: " We like to start companies with relatively small amounts of money and we like our investments to become profitable quickly." The company also states that in recent years it has made "between 8 and 12 fresh commitments a year" and usually makes "between 12 and 15 follow-on investments a year" in existing portfolio companies. Sequoia also claims to "provide assistance when it is requested or needed, but we do not want to run companies." Reportedly, however, the firm played a key role in running Yahoo! - Forbes reported that upon Sequoia's insistence, Jerry Yang and David Filo stepped aside to let Tim Koogle, a more experienced manager, take the reins as CEO. In 1999, Sequoia was bewitched by the Internet. According to Upside, Sequoia invested in "10 or more e-commerce and Internet infrastructure plays" through the company's $250 million fund, Sequoia Capital VIII. In its spending spree on Internet companies, Sequoia invested $10 million with MP3.com in March 1999, the largest amount Sequoia had invested in any single company to date.

Portfolio: the west is the best

The majority of Sequoia's investments are West Coast companies working in two areas: information technology and health care. On the IT side, the firm breaks down its portfolio into six areas: semiconductors (Linear Technology, Vitesse, AMCC); communications (Avanex, Cisco Systems, Redback Networks); software (Agile Software, Saba Software, Symantec); Internet (eToys, Yahoo!, E-Loan); computers (Apple Computer); and services (Flextronics, Scient). The firm's health care portfolio includes investments in biotechnology (Sangstat); devices (Aradigm); and services (Landacorp, Oxford Health Plans).

Partners: right place, right time

Don Valentine founded Sequoia Capital after working at Fairchild Semiconductor and founding National Semiconductor. He credits his experience with semiconductors for the firm's success, as well as, quite modestly, "being in the right place at the right time." Valentine was also one of the original investors in many groundbreaking companies such as Apple Computer, Atari and Oracle.